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EU integration risks not priced in by markets even as political pressures rise: MAS

The Monetary Authority of Singapore (MAS) on Tuesday made this assessment while pointing out that political risks, such as those from anti-globalisation, are another rising challenge to global financial stability.

PHOTO: REUTERS

SINGAPORE'S central bank says that markets have not accurately priced in risks to the European Union's (EU) integration efforts following the United Kingdom's vote to pull out from it.

The Monetary Authority of Singapore (MAS) on Tuesday made this assessment while pointing out that political risks, such as those from anti-globalisation, are another rising challenge to global financial stability.

"Financial surveillance increasingly needs to take into account possible shocks from and repercussions of political events," it said in its annual financial stability review for 2016, released on Tuesday.

For example, following the UK's vote, or Brexit, political uncertainty in Europe has increased.

Market voices on:

"Even then, markets do not appear to have priced in risks to EU integration as sovereign yields of more vulnerable eurozone economies remain much lower than during the height of the eurozone debt crisis," wrote MAS.